How lean helps firms mean business and be competitive
Working from an island, as exporters do in Ireland, forces us to be more competitive than companies in markets we sell to. Products and services that businesses develop here must offer customers more value than those of competitors. Irish exporters can't just be good, they must be better.
Last month, a milestone in achieving that ambition was realised. More than 1,000 companies have used Enterprise Ireland 'lean business' supports to take practical steps to become more competitive and improve as exporters.
Improving competitiveness can be a matter of survival in times of crisis, but all companies benefit from learning how to increase profit margins, build skills, reduce waste and increase capacity. Enterprise Ireland's Lean Start, Plus and Transform programmes help companies at all levels of familiarity to find improvements, from design to manufacturing and service delivery, down to getting money lodged in the bank, through logistics and supply chain.
The results these first 1,000 companies have reported show that applying lean is a practical way to improve competitiveness quickly. €1.5bn in cost savings have been recorded. Lean is also good for the domestic economy, with participating companies reporting a 10pc increase in employment.
Thermo Air, a manufacturer and distributor of air and heating systems, reduced costs by 8pc after completing Lean Start. "The implementation of lean has been a very positive beginning to a change in the mind-set of our traditional manufacturing company. The future success of the business is on the right trajectory," it reported.
Lean enabled the company to reduce lead times from six to three weeks, multiplying the number of orders handled.
NutriScience, a manufacturer and distributor of animal supplements, said: "This initiative was a real game changer. We went from being a reactive follower to being a proactive driver." The company achieved €176k in savings, at 8.6pc of turnover. In addition to a more engaged workforce and a safer work environment, lead time was reduced from an average of eight to a guaranteed three weeks.
WhatClinic.com, a website that helps patients find clinics and book appointments, used Lean Start to implement a pre-sales process that boosted new business by 15pc and increased their renewal rate to over 85pc.
The range of companies applying lean was clear at an event Enterprise Ireland co-hosted with the IDA in Maynooth last month. Speakers included representatives from the smallest companies to internationally award-winning practitioners. The depth of understanding attendees displayed shows that lean has been fully absorbed in Ireland. Experts now travel to Ireland to learn about initiatives SMEs here are implementing. This December, two Irish companies, Phonovation and Topflight, will host visitors from the EU-Japan Centre for Industrial Co-operation as part of a Lean in Europe series of best practice visits.
Reaching 1,000 projects is a high level of adoption but Enterprise Ireland aims to see that figure quadrupled. The take-up rate of Lean Start, Plus and Transform is rising as companies that see initial results progress further and companies yet to start feel the urgency of not being left behind. Other Irish agencies are keen to replicate the success Enterprise Ireland-backed companies have achieved. The IDA and Local Enterprise Offices implemented programmes that show how lean can be applied to make major competitiveness improvements for both multinationals and smaller regional companies. Teagasc and Bord Bia are planning similar initiatives.
Companies interested in joining a programme should visit the Lean Business Ireland website to find detailed information about supports and get inspired by nearly 100 case studies that show the savings and sales lean is already helping competitors to achieve.
Professor Richard Keegan is manager at Enterprise Ireland's competitiveness department
Sunday Indo Business